Six Things You Should Know Before Selling Into APAC
The start of a new year is typically the time for many to take stock and reflect on the peaks and troughs to shape their plans for the year ahead. With online shopping on the rise in Asia Pacific (APAC), many global companies are looking to expand their sales to the region and tap on its growing opportunities. PayPal’s recently-released cross-border commerce report for the APAC region is timely and can help merchants decipher the dos and don’ts to help fine-tune e-commerce strategies.
Conducted in partnership with Ipsos, the report examined the online and cross-border shopping behavior of over 23,200 consumers in 29 countries, out of which more than 4,300 were from APAC
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The
report uncovered many valuable insights on consumer behavior in APAC which can help merchants shape their e-commerce strategies. Here are seven key takeaways for merchants to better understand the landscape in APAC:
- China sees big jump but Singapore leads in global buying: Online shoppers in Singapore are ahead of their APAC counterparts, with 69 percent having shopped online both domestically and overseas. True to it being one of the world’s largest markets, China experienced not just a huge growth in the number of online shoppers now shopping cross-border (+9 percentage points since 2014) in 2015, but the country also came in second out of all 29 markets tested in terms of estimated overall online spend.
- US is the reigning online shopping destination: When it comes to the popularity of online shopping destinations, USA continues to be the undisputed champion, followed by China, UK and Japan. Despite the wide variety of e-commerce stores, consumers still favor large ‘global’ stores such as Amazon when it comes to cross-border shopping.
- Consumers turning to e-commerce to fulfill basic necessities: Fashion (clothing, footwear & accessories) has surfaced as the top category (bought by 53 percent of APAC cross-border shoppers) for cross-border shopping across all markets. However, consumers are now turning to e-commerce to fulfill basic needs, with groceries emerging as one of the top growth categories for online shopping in APAC.
- Mobile spending cannot be ignored: Consumers in India and China are the most mobile savvy, nearly doubling the average seen for all 29 countries interviewed, with an estimated 41 percent of their online spend done via smartphones and tablets. With greater access to the Internet, China and India are also expected to have the highest growth rate in terms of mobile spend, growing at 52 percent (CAGR to 2017) and 68% (CAGR to 2017) respectively.
- Free shipping rules: APAC shoppers display a pragmatic nature, with cost and value for money being one of the key considerations when shopping internationally. Close to half (47 percent) cite free shipping as a motivation for making cross-border transactions, while 46 percent value safe payment and 41 percent consider proof of authenticity as drivers for cross-border purchases rather than from domestic shops.
- Shipping cost is viewed as a hurdle: In the same vein, shipping cost is also cited as the top barrier for shopping cross-border (by 47 percent of online shoppers), followed by insufficient help when problems are encountered (44 percent) and the possibility that products will not be received (42 percent).
So with these insights into consumer shopping behavior in APAC, here are some tips on how to expand your cross-border sales and discover new revenue opportunities in 2016:
- Plan your entry into a new country: Do your research – what are the local preferences when it comes to goods, payments or delivery? Who are your competitors and are there cultural differences? Arm yourself with ample information to build an effective strategy.
- Taxes, laws and regulations: Comply with local laws and consider duties and taxes, customers and documents needed.
- Accepting payments: Assure customers of secure and convenient payments using their preferred method. For instance, PayPal offers quicker, more convenient, and more secure payment options to over 173 million active accounts in 203 markets and hold balances in 26 currencies globally.
- Shipping services: Consumers want to shop with peace of mind knowing that their purchases will be delivered and that they can be returned with ease if there is a problem. With PayPal’s improved Seller Protection policy, businesses are safeguarded from losses on eligible transactions.
- Confidence building: Build confidence and credibility with your website – ensure that your site is error-free and easy to navigate. A simple spelling error or broken link could lead consumers to abandon the transaction.
- Great customer service: Proactively anticipate and address customer concerns. Provide your shopping and return policies, and display your contact information prominently. Consumers will shop with confidence knowing that they will be protected when encountered with unexpected problems.
- Invest in SEO: When it comes to sourcing international products, SEO has a big influence. Cross-border shoppers cited the following methods when asked how they find international websites:
- I go directly to websites I have used in the past (58 percent of all surveyed cross-border shoppers)
- I go directly to websites I know the web address for (40 percent)
- When I search for particular brands or products on a search engine, sometimes this leads me to foreign sites (38 percent)
- I go to sites recommended by friends/family (36 percent)
- I follow links from shopping comparison sites (25 percent)
Hamish Moline, VP, APAC Merchant Services, PayPal